DAIRY MARKET REPORT VOLUME 29 | ISSUE 6
6/22/2026
EXECUTIVE SUMMARY U.S. milk production grew 2.9% in April on a component basis, as producers added more cows to the milking herd to take advantage of returns from beef-on-dairy and productivity increased. Strong milk production has translated into ample cheese and butter production, limiting price upside. Solid domestic sales and surging exports for those two product categories have kept prices relatively balanced, despite low consumer confidence. On the protein side of the question, prices remain historically firm as nonfat dry milk (NFDM) and whey protein concentrate (WPC) supplies remain hard to come by. However, at time of writing, NFDM prices are returning to earth as additional supply and loss of export sales pull U.S. prices back towards parity with Oceania and Europe. The Dairy Margin Coverage Program Margin for April improved to $10.54/cwt, boosted by an elevated AllMilk Price, reflecting NFDM hitting record highs. Yet the improved margin disguises the increase in input costs, which aren’t built into the feed calculation. High oil prices and inflation also affected producers, with electricity prices climbing 7% and diesel rising 50% over the past year. Although falling NFDM prices may impact the All-Milk Price, easing corn and soybean meal futures are anticipated to keep DMC margins above the $9.50/cwt payment threshold throughout 2026.
GRAPH OF THE MONTH Consumers have been feeling inflation effects for months as Middle East conflict has raised oil prices and sent additional costs cascading through supply chains. Inflation crossed a critical threshold in May, outpacing wage growth for the first time since late 2023, exacerbating economic pressure on an already strained consumer. While dairy product sales have increased modestly at retail, food service volumes will likely suffer if this trend continues, particularly for lower-income households. News of an agreement and the reopening of the Strait of Hormuz at time of writing provides a dose of optimism that the worst of the potential economic outcomes can be avoided.
Source: NMPF, FRED. CPI data missing for October 2025 due to lapse in appropriations